Nonparametric bounds on employment and income effects of continuous vocational training in East Germany

This paper explores the potential of an approach suggested by Manski to obtain nonparametric bounds of treatment effects in evaluation studies without knowledge of the participation process. The practical concern is the estimation of the effects of continuous vocational training in East Germany. The empirical application is based on a large cross-section that covers about 0.6% of the total population in 1993. The results are rather mixed. The large width of the intervals obtained emphasize the fundamental problem of all evaluation studies without good knowledge of the relationship between potential outcomes and the participation process. However, in some cases, suitable exclusion restrictions are indeed able to bound the treatment effects strictly away from zero.